____ 3. The moving expense provisions are designed to ensure that deductions are granted only when...

____ 3. The moving expense provisions are designed to ensure that deductions are granted only when expenses arise from business concerns. Which one of the following statements most correctly describes the operation of the rules governing moving expenses?

a. A deduction is denied unless the taxpayer moves more than some predetermined amount from his former residence.

b. A deduction is denied unless the taxpayer's commute, absent the move, would have increased by more than some predetermined amount.

c. A deduction is granted as long as a taxpayer's move is attributable to a job change.

d. A deduction is granted if the taxpayer obtains either part-time or full-time employment at the new job site.

Expert Solution

In the event of movement due to a change in job or business location than it is allowed to deduct moving expenses. However, such expenses does not covers meals.

In order to deduct moving expenses, three requirements must surely be met:

The move must closely relate to the initiation of work. Generally, moving expenses incurred within one year of the date you start work at a new job location are considered.

Move must meet the prescribed distance test. New main job location must be at least 50 miles farther from your old home than your previous job location. To compute if old job location was 3 miles from your old home, your new job must be at least 53 miles from your old home.

Time test: After the move, work must be performed full-time at new job for at least 39 weeks in the first year. If having own business i.e. self-employed, it is required to meet this test and work full-time for a total of at least 78 weeks during the first two years at your new job site. If income tax return is due before the conditions are met for this test, deduct can still be claimed for moving expenses provided they are met.

Considering all the options, option (c) i.e. “A deduction is granted as long as a taxpayer's move is attributable to a job change” falls closely to the prescribed conditions

ekkarill92 answered 1 year ago

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